# Enforcement activity arising from online sales



## BlackIrish (Jul 29, 2008)

Saw this in the news. Good reminder.

***********************************

*OFAC levies fines against five for buying Cuban cigars* 
The U.S Office of Foreign Assets Control (OFAC), a unit of the U.S. Treasury, was especially active in July, issuing 19 penalties against entities and individuals who violated various embargo provisions, including those against Cuba.

Of the 19 actions, 14 involved Cuba and the others involved Iran, Liberia and Burma. Five fines were levied against individuals who purchased Cuban cigars via the Internet:

The largest fine was for $4,351.50 against one person who bought cigars on six occasions between July of 2003 and July, 2004. It's one of the largest penalties handed out this year.

A fine of $1,681.55 was levied for buying cigars between November 2004 and August 2006.

A fine of $1,225.00 was assessed for buying Havanas four times between October 2003 and March 2004.

A fine of $650.00 was imposed for two purchases between December 2004 and March 2005.

A fine of $395.25 was imposed for buying Cuban cigars between December 2004 and January 2005.

These actions bring the OFAC's total Cuban-cigar-violations total to 23 separate incidents through the first seven months of the year, compared to 13 for all of 2007. The total amount of fines imposed now total $31,254.33, an average of $1,358.88 per incident.
_~ Rich Perelman_


----------



## Snake Hips (May 30, 2008)

Some of the incidents in the link are some of the stupidest things I've ever heard. Getting fined for making a hotel reservation? For sending money? For an "apparent attempt to purchase online gold without an OFAC license?"


----------



## mikeyj23 (Feb 25, 2007)

Snake Hips said:


> Some of the incidents in the link are some of the stupidest things I've ever heard. Getting fined for making a hotel reservation? For sending money? For an "apparent attempt to purchase online gold without an OFAC license?"


Stupid? Maybe. Illegal? Completely.


----------



## Snake Hips (May 30, 2008)

mikeyj23 said:


> Stupid? Maybe. Illegal? Completely.


Of course it's illegal, but for that it makes you question some of the laws...are they really laws we want to be wasting our tax money on?

And WTH is online gold and why are we spending taxpayers' money on its control?


----------



## mikeyj23 (Feb 25, 2007)

Snake Hips said:


> Of course it's illegal, but for that it makes you question some of the laws...are they really laws we want to be wasting our tax money on?
> 
> And WTH is online gold and why are we spending taxpayers' money on its control?


eGold is a form of online currency used for payments, somewhat like PeiPal. The U.S. government is not controlling eGold, but the individual used a currency exchanger based in Iran, violating Iranian Transaction regulations.


----------



## bige610 (Jul 1, 2008)

this is why they will never legalize cubans. they make this much just enforcing the embargo.


----------



## SeanGAR (Jul 9, 2004)

BlackIrish said:


> These actions bring the OFAC's total Cuban-cigar-violations total to 23 separate incidents through the first seven months of the year, compared to 13 for all of 2007. The total amount of fines imposed now total $31,254.33, an average of $1,358.88 per incident.
> _~ Rich Perelman_


Reminder of what?

That caving in to the feds for a grand is cheaper than fighting for your rights in court?

Well .. I already knew that.

They have won exactly zero cases in court for online purchase Cuban cigar violations *as far as I know*.

All of these cases were people sending in cash when asked by the OFAC. People could have said "see you in court, bubba" and we would never hear of them as the OFAC has not prosecuted anybody for online Cuban cigar purchases *as far as I know*.

As we are trading with Cuba like the dickens these days ... why the embargo and enforcement banning Cuban cigars? Slightly capricious methinks.

If one was to follow the OFAC regulations to the letter, you would not be able to eat overseas, unless you are certain that there is no Cuban sugar in the product. Are they charging people for consuming Cuban sugar while in the UK?

Selective enforcement doesn't typically fly very far.

All it takes is one person to challenge this in court and this will all be done with.

It won't be me .. I don't have the money to fight this in court .. I'd fold and send in the $1358.88 if asked.


----------



## papajohn67 (May 25, 2006)

Looking at the dates of the violations they are either slow as heck in handeling these cases or seem to be trolling peoples personal financial records and coming up with hits. Makes me feel so much safer.


----------



## M1903A1 (Jun 7, 2006)

bige610 said:


> this is why they will never legalize cubans. they make this much just enforcing the embargo.


I call :BS to that. Just think how much they could make, in sales taxes ALONE, if they were legal.

The dates of these infractions makes me wonder...could these be from that spate of actions a couple of years ago that was tied to two Eastern vendors and another online payment site?


----------



## SeanGAR (Jul 9, 2004)

M1903A1 said:


> I call :BS to that. Just think how much they could make, in sales taxes ALONE, if they were legal.


Exactly. They are not budging on the embargo because of the Cuban exile swing vote in swing state Florida. If Cuban exiles were democrats in NY, we would have no embargo today.


----------



## DonnieW (Jul 2, 2008)

papajohn67 said:


> Looking at the dates of the violations they are either slow as heck in handeling these cases or seem to be trolling peoples personal financial records and coming up with hits. Makes me feel so much safer.


Frankly I don't know why they even go after it. It certainly isn't low hanging fruit - there is a lot of legwork involved for relatively little pay off. Unlike going after illegal downloaders (another topic altogether), there is no industry behind this willing to 'sponsor' and/or support the government in their efforts.


----------



## SeanGAR (Jul 9, 2004)

DonnieW said:


> there is no industry behind this willing to 'sponsor' and/or support the government in their efforts.


Cuban exile votes in florida. 'nuff said.


----------



## bige610 (Jul 1, 2008)

papajohn67 said:


> Looking at the dates of the violations they are either slow as heck in handeling these cases or seem to be trolling peoples personal financial records and coming up with hits. Makes me feel so much safer.


got to love the patriot act


----------



## SeanGAR (Jul 9, 2004)

bige610 said:


> got to love the patriot act


Had nothing to do with this.

There is a comprehensive thread on cigarpass that 3x5card started which covers most of the details.

Appears the feds landed into some (limited) worldpay data for cigar sales from particular vendors due to an unrelated investigation. The gov agents in this are only doing their jobs ... how can we complain? It is the idiots we vote into office that have the power here .... and we vote for idiots that support the embargo.


----------



## bige610 (Jul 1, 2008)

oh i just figured since they were looking into financial records. glad to hear it was just some records from the actual vendor. i would hate if the government knew about all the cigars booze and **** i charge every month. or worse if my wife found out


----------



## M1903A1 (Jun 7, 2006)

bige610 said:


> oh i just figured since they were looking into financial records. glad to hear it was just some records from the actual vendor. i would hate if the government knew about all the cigars booze and **** i charge every month. or worse if my wife found out


AFAIK it wasn't the vendor...it was the payment service. Turns out I know somebody who's been ordering from the same vendor in question for years, says he's never used the payment service in question, and hasn't had a problem yet.


----------



## BlackIrish (Jul 29, 2008)

SeanGAR said:


> Reminder of what?
> 
> That caving in to the feds for a grand is cheaper than fighting for your rights in court?
> 
> ...


Well, since no one here is doing anything illegal, it's a good reminder of why we don't.

As for the idea that it would take only one challenge to put an end to this, I'd have to disagree.

There's nothing unconstitutional about the Trading with the Enemy Act or the OFAC regs that implement it. Are they bad policy? Personally, I think so, but there are many who would disagree and present cogent and compelling arguments in support of the current policy. Are they ineffective, even counterproductive? I tend to think so, but there are plenty of really smart folks who've done Ph.D. level analyses on the effectiveness of trade sanctions who know a lot more about it than I do. From my commonsense vantage point, whatever arguments might be made about the effectiveness of embargos and sanctions don't hold up very well when the US is pretty much the only country with an embargo and virtually every other country in the world does business with Cuba. But again, many will emphasize the importance of standing on principle and refusing to deal with regimes that are totalitarian.

But the reason these cases settle is simple: the gov't has a good case, the defenses are few, and the risks of rolling the dice and going to the mat (that is, all the way to trial) are huge. These aren't cases, I'd suggest, where there are real doubts about liability. The gov't has the retailers' records, the records of payment, and the records of shipment and delivery. The paper trail is easy to obtain and pretty compelling. The individuals can't plausibly say that they didn't know they were buying cigars of Cuban origin; the online retailers' websites and the products themselves (prominently labeled "La Habana, Cuba") all make it unmistakably clear. That's how these cases are different from the Cuban sugar in London scenario you spell out. And these cases aren't about the guy who smokes a Monte No. 2 while overseas, or even about the guy who picks up a box at the duty free shop and brings it back home, which are tougher to justify. They involve repeated orders of Cuban goods shipped into the US, and thus a more flagrant violation from the standpoint of law enforcement.

So the individuals involved have a pretty easy choice: (a) settle by paying a civil penalty that's relatively modest (a couple of thousand at most) or (b) flip the feds the bird, tell them to indict you, pay a lawyer lots of money to try to come up with a defense, and hope against hope that you'll somehow avoid a sentence that's ten times bigger and might involve jail time (those federal sentencing guidelines, even if they're only advisory these days, are pretty stiff). Not to mention the consequences of having a felony conviction on your record, which doesn't help your employment prospects. Have a CPA license? It can be pulled for a felony conviction. A license to practice law or medicine or a certification to teach? It's at risk. Even applying for a job at Starbucks probably requires you to answer whether you have any felony convictions on your record.

Should federal law enforcement resources be focused on the otherwise upstanding citizen who wanted to smoke some Cohiba Siglos VIs with his buddies? Not to my mind. But the feds, and particularly the feds whose job it is to enforce these regulations, see it differently.

So the point of my reminder is that while gorillas who love cigars might see ordering some Cubans online as a harmless pecadillo, there are real risks because other people, like federal law enforcement, see it as a serious violation of a clear legal prohibition. While I'm generally in the first group of gorillas, I have enough to worry about without having to deal with threatened civil and criminal liability. That's all.

I didn't mean to go on this long, and I sure don't want to be seen as lecturing. I just wanted to explain why I brought this information to everyone's attention. And now I'm going to continue to enjoy my non-Cuban but still quite tasty Rocky Patel.

Rock on.

BlackIrish


----------



## BlackIrish (Jul 29, 2008)

papajohn67 said:


> Looking at the dates of the violations they are either slow as heck in handeling these cases or seem to be trolling peoples personal financial records and coming up with hits. Makes me feel so much safer.


I don't know for sure but from my general experience would expect that the individual fines are the result of intercepted packages and/or investigations of the retailers themselves and/or the financial intermediaries that facilitate payment. It takes some time for govt enforcement agents to decide which cases to pursue, to put the cases together, to decide what fines to impose, to notify the individuals involved, and to reach a settlement with them (which almost inevitably involve negotiations with lawyers, unless the individuals involved decided to negotiate with the feds directly).

So if most of these date from transactions through late 2006 or early 2007, it took about 18 mos to reach a resolution. In the law enforcement/legal world, that's not that long. I'd expect that the next quarterly report from OFAC on its enforcement actions will show some more activity from mid-2007.


----------



## renton20-cl (Apr 1, 2008)

SeanGAR said:


> Exactly. They are not budging on the embargo because of the Cuban exile swing vote in swing state Florida. If Cuban exiles were democrats in NY, we would have no embargo today.


I blame the electoral college. If we elected our presidents by popular vote the embargo would have been lifted years ago by both parties.

One man one vote. :gn:gn:gn:gn:gn


----------



## robofan (Jun 7, 2008)

BlackIrish said:


> Saw this in the news. Good reminder.
> 
> *OFAC levies fines against five for buying Cuban cigars*


Are you also aware that if you speed or run a red light or liter or jay walk and get caught you will also pay a fine?

The basic principal is break the law and get caught = pay fine.

Do you think that we are all so ignorant that we don't understand this principal and need you to remind us? I hope not.


----------



## BlackIrish (Jul 29, 2008)

robofan said:


> Are you also aware that if you speed or run a red light or liter or jay walk and get caught you will also pay a fine?
> 
> The basic principal is break the law and get caught = pay fine.
> 
> Do you think that we are all so ignorant that we don't understand this principal and need you to remind us? I hope not.


Just meant to post some interesting news, Robofan. "Reminder" was probably a poor choice of words. I apologize if it was insulting.

BlackIrish


----------



## M1903A1 (Jun 7, 2006)

renton20 said:


> I blame the electoral college. If we elected our presidents by popular vote the embargo would have been lifted years ago by both parties.
> 
> One man one vote. :gn:gn:gn:gn:gn


I think we'd have a LOT more political problems to gripe about (like most of the country descending into political irrelevance and everything being run by the big population centers) if that were the case.


----------



## SmokeyJoe (Oct 3, 2006)

robofan said:


> Are you also aware that if you speed or run a red light or liter or jay walk and get caught you will also pay a fine?
> 
> The basic principal is break the law and get caught = pay fine.
> 
> Do you think that we are all so ignorant that we don't understand this principal and need you to remind us? I hope not.


It would seem the purpose of sharing this article is to demonstrate the increased activity and efforts being put into enforcement. As it indicated, there was a significant increase in the number of fines from the year before. Take it for what it is... a word to the wise. :ss


----------



## jbock (Feb 22, 2007)

DonnieW said:


> Frankly I don't know why they even go after it. It certainly isn't low hanging fruit - there is a lot of legwork involved for relatively little pay off. Unlike going after illegal downloaders (another topic altogether), there is no industry behind this willing to 'sponsor' and/or support the government in their efforts.


This legwork could actually pay off in the governments fight to prevent the purchase of Cuban cigars. Select a few cases that involve fairly minor players (you and I). Fine them just enough to make it expensive, then publish the report for all to read. Government scare tactic that implies no one is safe....even the small-time offender.

Jim


----------



## SeanGAR (Jul 9, 2004)

BlackIrish said:


> There's nothing unconstitutional about the Trading with the Enemy Act or the OFAC regs that implement it.


Who said there was something unconstitutional about the OFAC regulations? If the regulations ban Cuban cigars, the feds need to prove the cigars are Cuban and in your possession.

An online order is not proof of possession. Intent, sure, but that is a different kettle of fish.

They also cannot prove the cigars are of genuine and of Cuban origin whether the feds have them in hand or not.

Of course, the cheaper and easier route if somebody is caught in this mess is to plead guilty, negotiate a comprehensive settlement, and move on.


----------



## DonnieW (Jul 2, 2008)

jbock said:


> This legwork could actually pay off in the governments fight to prevent the purchase of Cuban cigars. Select a few cases that involve fairly minor players (you and I). Fine them just enough to make it expensive, then publish the report for all to read. Government scare tactic that implies no one is safe....even the small-time offender.
> 
> Jim


I hear yeah and tend to agree on that approach, but historically we know that doesn't work. No matter what the penalty, it likely won't deter the majority of people. It hasn't done so for anything from illegal downloaders to drunk drivers. Folks still choose to do what they want to do.


----------



## tnip23 (Oct 31, 2006)

renton20 said:


> I blame the electoral college. If we elected our presidents by popular vote the embargo would have been lifted years ago by both parties.
> 
> One man one vote. :gn:gn:gn:gn:gn


----------



## poker (Dec 11, 1997)

Its just a reminder why we also have rules here at Club Stogie.


----------



## BlackIrish (Jul 29, 2008)

SeanGAR said:


> Who said there was something unconstitutional about the OFAC regulations? If the regulations ban Cuban cigars, the feds need to prove the cigars are Cuban and in your possession.
> 
> An online order is not proof of possession. Intent, sure, but that is a different kettle of fish.
> 
> They also cannot prove the cigars are of genuine and of Cuban origin whether the feds have them in hand or not.


Ok, I see what you're driving at; I didn't appreciate your point before.

But one of the interesting things about the law and the regs is that they don't ban *possession* of Cuban cigars; they ban transactions involving goods of Cuban origin (that's the phrase from the regs). So they don't actually need to catch you with the goods in your possession; it's enough to show that you were involved in a transaction involving Cuban goods. In theory, then, a US resident might be breaking the law by ordering Cuban cigars and having them shipped to a buddy in Canada as a gift -- even though the US resident never took possession of the cigars, and they went to a country where they were legal. I'm not defending this; just describing (and, obviously, this isn't a legal opinion, just my reading).

Your point about proving that the cigars really came from Cuba is well taken. If the gov't couldn't actually lay their hands on the cigars themselves, I'd guess that they'd base their case on an order placed for Cubans, the payment for and delivery of those Cubans, and the seller's records showing that the goods sold came from Cuba. Is that enough? Don't know. Don't want to find out.


----------



## andrewsutherland2002 (Feb 16, 2008)

renton20 said:


> I blame the electoral college. If we elected our presidents by popular vote the embargo would have been lifted years ago by both parties.
> 
> One man one vote. :gn:gn:gn:gn:gn


 If it takes the popular vote to lift the embargo, then I would rather CCs be illegal forever. I don't want NY and LA alone determining who our president is. The popular vote screws the rest of us.:2 I'll leave the politics alone now.

No offense to those here who live in NY and LA.


----------



## Coffee Grounds (Feb 14, 2007)

I think that is a very low number compared to how many online sales are actually occuring.


----------



## chenvt (Apr 12, 2008)

andrewsutherland2002 said:


> If it takes the popular vote to lift the embargo, then I would rather CCs be illegal forever. I don't want NY and LA alone determining who our president is. The popular vote screws the rest of us.:2 I'll leave the politics alone now.
> 
> No offense to those here who live in NY and LA.


I don't see how the situation in the above is any different than what we have now? Right now it's not LA or NYC or Boston or whatever left-ish metropolitan location you want to name. It's Florida, Ohio, Pennsylvania. And Iowa and New Hampshire get all the love during primaries? In fact, California, NY, Texas, etc are some of the most ignored states when it comes to presidential campaigning. Why? Because they're a lock for either the Democrats or the Republicans.. All the "swing states" are the ones that people concentrate on.. I don't think that is any better than the above situation.

Absolutely defeats the idea of every vote counts, doesn't it? I've lived in VA my entire life, never voted once.. why? It usually goes red state.. This year I'm voting, why? Because it's a swing state and my vote for the first time ever in a presidential election might mean something


----------



## air1070 (Jun 24, 2006)

M1903A1 said:


> AFAIK it wasn't the vendor...it was the payment service.


It was...this Vendor wouldn't do anything to screw anybody...


----------



## seegarfan (Oct 27, 2007)

SeanGAR said:


> Who said there was something unconstitutional about the OFAC regulations? If the regulations ban Cuban cigars, the feds need to prove the cigars are Cuban and in your possession.
> 
> An online order is not proof of possession. Intent, sure, but that is a different kettle of fish.
> 
> ...


I agree....were is the proof they were even delivered........


----------



## LANTSailor (Aug 5, 2008)

bige610 said:


> this is why they will never legalize cubans. they make this much just enforcing the embargo.


Huh? $31K this year? That doesn't even pay for a low level bureaucrat with a phone line and internet access. The OFAC is a multi-million dollar operation. It looks more to me like they came across some low lying fruit while doing other investigations and it was decided to proceed with some prosecutions since they had the data.

Less than a fifty cases a year is tiny! There are probably that many purchases in any given month in a good sized metropolitan area. This is just a scare story blown up from some small coincidental prosecutions. Worth thinking about? Sure. Worth getting all worked up about and worrying about? Not really. If you are breaking the law, you should already know the penalty if you become one of the 0.01% who get caught.


----------



## Ozz1113 (Feb 13, 2008)

They don't have to be delivered. You already paid for them. The 'trading' of funds is illegal.
I will always avoid Hong Kong and Australlian dealers.


----------



## scrapiron (Jun 24, 2006)

Ozz1113 said:


> They don't have to be delivered. You already paid for them. The 'trading' of funds is illegal.
> I will always avoid Hong Kong and Australlian dealers.


I'm curious now... Why avoid Hong Kong?


----------



## zemekone (Aug 1, 2004)

_this discussion is on the brink of getting shut down....

please tone it down a little guys thank you...

_


----------



## Ozz1113 (Feb 13, 2008)

There have been a ton of OFAC reports from the Asia Pacific area. I remember reading the OFAC reports and seeing the location of where the transaction took place. I don't see that on any of the recent summaries though.


----------

